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Now is the Time to Prepare for MACRA: 2017 Will Bring Major Changes to Physician Medicare Reimbursement
BlogHealth Law Rx Blog

MACRA (the Medicare Access and CHIP Reauthorization Act of 2015) is bi-partisan legislation that was enacted to change Medicare reimbursement from being based on the current system of volume of services provided to reimbursement based on the quality of care, as well as value and participation in alternative payment and delivery models. MACRA replaces the Sustainable Growth Formula (SGR), which has for decades required Congress to pass periodic last minute ‘doc fixes’ to prevent physician reimbursement rates from plummeting. MACRA (also called the Quality Payment Program) replaces the Physician Quality Reporting System (PQRS) and the EHR Incentive (Meaningful Use) Programs. MACRA only affects physician and non-physician practitioner reimbursement under Part B. It does not affect Medicare Parts A, C, D or reimbursement for diagnostic tests or other items and services provided under Part B.

There are 2 “tracks” or methods by which physicians will be paid under MACRA, and physicians need to be thinking now about which one they will choose. The first is the Merit-Based Incentive Payment System (MIPS), which will be the track most physicians will likely choose. MIPS requires that physicians begin tracking certain categories of data between January and October, 2017. Physicians will then need to report that data to CMS no later than March 31, 2018. Based on the results of that data, the physicians’ Medicare fee-for-service rates can increase or decrease as much as 4% starting January, 2019. The percentages go up each year after that and will always be based on the data reported for the preceding two years. Physicians who wish to report as a group must register as a group with CMS no later than June 30, 2017.

The second track for physicians to participate in is an Advanced Alternative Payment Model (Advanced APM). An APM is essentially a payment model that incentivizes high-quality and cost efficient care, and can be based around a specific clinical condition, a care episode or a specific patient population. An example of an APM is an Accountable Care Organization. An Advanced APM, required in this track, is an APM that shares risk with CMS based on patient outcomes. Physicians who participate in an Advance APM don’t have to separately report data to CMS, and these physicians will receive a 5% incentive payment in 2019 and each year thereafter if they qualify. There is no payment reduction in this track, as there is in MIPs.

Because of these major changes to Medicare reimbursement, physicians who earn a substantial portion of their income through the Medicare program need to familiarize themselves – and quickly – with MACRA. While physicians will not feel the effects of MACRA in their wallets until January of 2019 (and the effects can be significantly greater or lesser reimbursements), they need to start taking action as early as January 2017 in order to positively affect the future. MACRA is not just another tweak to the physician fee schedule that can be left to the attention of a physician practice’s office manager or billing company to navigate. Unlike prior fee schedule fixes, MACRA requires careful planning and decision making by physicians themselves, and this planning should be underway now.

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